Template-Type: ReDIF-Paper 1.0
Title: Regulation of an Open Access Essential Facility
Author-Name: Axel Gautier
Author-Name: Manipushpak Mitra
Author-Email: 
Classification-JEL:   D82, H54, L11, L51
Keywords:  Regulation, Railways, Network, Entry, Competition, Access charge, Asymmetric Information
Abstract:   In this paper we consider the problem of regulating an open access essential facility. A vertically integrated 
	firm owns an essential input and operates on the downstream market under the roof of a regulatory mechanism. 
	There is a potential entrant in the downstream market. Both competitors use the same essential input to provide the 
	final services to the consumers. The regulator designs a mechanism that guarantees financing of the essential input 
	and adequate competition in the downstream market. We consider a regulatory mechanism that grants 
	non-discriminatory access of the essential facility to a competitor. We show that this mechanism is welfare 
	improving but it generates inefficient entry. That is a more efficient competitor may stay out of the market or a 
	less efficient competitor may enter the market.
Note: 
Length: 26
Creation-Date: 2003-08	
Revision-Date: 
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse19_2003.pdf
File-Format: application/pdf
Handle: RePEc:bon:bonedp:bgse19_2003